Cboe bitcoin futures open for trading


In a major step towards legitimising the virtual currency, the Bitcoin has begun trading on a major United States exchange. On Coinbase Inc.'s GDAX exchange, prices zoomed up to nearly $20,000 from $16,000 in only about 90 minutes - then crashed back down.

The opening price for XBT was $15,000 and 890 contracts1 were traded by 7:15 p.m. CT. Monday, December 11, will be the first full day of trading.

Bob Fitzsimmons, a futures manager at Wedbush Securities, told AFP approximately 150 trades were made in the first few minutes. This movement has been seen by some as a step towards legitimising the currency and is expected to be followed by a listing on the rival Chicago Mercantile Exchange.

The futures contracts may open the door to greater inflows of institutional money, while also making it easier to bet on bitcoin's decline.

The Cboe and CME launches were made possible following approval by the US Commodities and Futures Trading Commission (CFTC).

However, the regulator warned: "Investors should be aware of the potentially high level of volatility and risk in trading these contracts".

Bitcoin futures are spiking in their first hours of trading.

Hussein Sayed, chief market strategist at online broker FXTM, said the futures launch marked a "new phase" for the cryptocurrency.

Many are wary of embracing bitcoin because it has no central bank backing it and no legal exchange rate.

"The one-month contract is trading at around an 11% premium to the underlying Bitcoin, and for me that's a clear indication that there's no connection between the two markets", said Lukas Daalder, chief investment officer at Robeco.

The Futures Industry Association, which includes some of the world's biggest derivatives brokerages, has criticised the CFTC's decision, arguing that insufficient attention has been paid to the risks involved.